·A basket of agreements on the development of the Chabahar port on the Gulf of Oman and onward connectivity with Afghanistan have been signed recently. It has taken us nearly 13 years since the idea was first mooted.

·In consequence, we have a set of interlinked outcomes:

1)a contract for the development and operation for 10 years of two terminals and five berths;

2)the extension of credit lines of $500 million for the port and of Rs.3,000 crore for importing steel rails and implementation of the port;

3)memorandums of understanding on provision of services by Indian Railways, including financing to the tune of $1.6 billion, for the Chabahar-Zahedan railway line — a line that is also part of the trilateral agreement between India, Iran and Afghanistan on a transit and trade corridor.

·For India, the projects have specific economic and strategic significance. India and Afghanistan have failed to realise the full economic potential of their friendship owing to connectivity problems.

·The Pakistan link between India and landlocked Afghanistan has been an obstacle, given Islamabad’s tense diplomatic ties with both New Delhi and Kabul, and sometimes with Tehran too.

·Once the Chabahar port is developed, Indian ships will get direct access to the Iranian coast; a rail line to the Afghan border town of Zaranj will allow India a route around Pakistan.

·This will surely boost trade with Iran and Afghanistan.

·Besides, the proposed free trade zone in the Chabahar area offers Indian companies a new investment destination at a well-connected port city.

·India has already said its companies will set up “plants in sectors such as fertilizers, petrochemicals and metallurgy” in the zone.

·The strategic import of the project lies in especially by way of providing access to Afghanistan which lies near the Iran-Pakistan border.

·We can access eyes-and-ears on the Makran coast to monitor not only the Gwadar port being developed by the Chinese, but also Pakistani naval activity under the UN umbrella in the Persian Gulf.

(Makran is a semi-desert coastal strip in Balochistan, in Pakistan and Iran, along the coast of the Persian Gulf and the Gulf of Oman.)

·From a strategic point of view, Chabahar is situated just 100 km from Pakistan’s Gwadar port, the centrepiece of a $46 billion economic corridor that China is building. Though the Indian investment in Chabahar, at $500 million, does not match the scale of the Chinese project, the Chabahar port will act as a gateway for India to Central Asia bypassing the China-Pakistan arc. The long-term potential of this connectivity is immense.

·Iran began accumulating billions of rupees in a UCO Bank account owing to India’s inability to pay for energy imports in U.S. dollars during the period of US sanctions against Iran. In fact, this period of Iranian isolation and dependence on India afforded us considerable leverage — both in pushing our exports to Iran and in pressing forward with Chabahar.

·Iran has frequently objected to Pakistan's attempts to draft anti-India resolutions at international organisations such as the OIC and the Human Rights Commission.

·India welcomed Iran's inclusion as an observer state in the SAARC regional organisation.

·Also, the world's largest population of Zoroastrians are the Parsi community in India.

·The basic point is that Iran has always potentially been the most important power in the region. It has a unique geopolitical location owing to its reach in Central Asia and Caucasus as well as in West Asia and the Persian Gulf. Because of its geography, Iran was historically an important arena of great power jostling for influence.

·After the Second World War the U.S. supplanted Britain as Iran’s main external patron, forcing out the Soviets from the country in 1946 and overthrowing an elected nationalist leader, Mohammad Mossadegh, seven years later.

·After the revolution of 1979, of course, Iran became beyond the pale for the U.S.

·In the 1980s, the Americans and their Arab allies supported the Iraqi aggression on Iran.

·The US wars against Iraq in 1991 and 2003 removed the strongest regional counterweight to Iran.

·The rise of the Islamic State apart, the disintegration of the region has empowered Iran by driving Iraq, Syria and Russia closer to it.

·The prognosis seems inevitable: Iranian hegemony in Iraq and what remains of Syria, as well as its political influence in Lebanon, Gaza and Bahrain.

·If India desires any influence in the region, it must prepare to navigate these tricky geopolitical shoals. Even as India maintains its equities with the Gulf countries and Israel, it will have to forge a more strategic relationship with Iran.

Hindrances:

·The real challenge for India is in execution. If MoUs were an index of influence, New Delhi should have had a lot more of it. India’s record in finishing big-ticket projects abroad is far from consistent.

·Also, with Tehran becoming the new destination of global powers, India needs to energise its diplomacy to keep engagement with Iran on an even keel, irrespective of outside pressure.

·The United States’s sanctions on Iran had created hurdles.Even presently, the United States stated that it is “watching very closely” India’s growing ties with Iran. As of now, there is no military or counter-terrorism cooperation between the two countries that could be a cause of concern for the US.

·Tehran has also reset its ties with Islamabad following a successful visit by President Hassan Rouhani.

·Iran will look for opportunities for connectivity and trade opened up by the Chinese ‘One Belt, One Road’ initiative. Chabahar is one of the several such avenues that it is currently exploring.

·Once the financial sanctions on Iran begin to ease properly, there is bound to be a spurt of European investment in the country.

·As far as Afghanistan is concerned, it is clear that Iran does not share India’s opposition to any attempt at reaching out to the Taliban. With increasing turbulence in Iraq and Syria and the possibility of the Islamic State expanding into Afghanistan, Iran wants to keep its northern frontiers stable.